THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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CAROL COSTELLO, CNN ANCHOR: People rushed to the hospital. Some victims as young as 14.

Plus, back to school. Danvers' doors reopened.

UNIDENTIFIED FEMALE: I don't know why someone would do this to someone so nice.

COSTELLO: A Massachusetts town searching for answers after the unthinkable.

UNIDENTIFIED FEMALE: You ever talk about concern about one of her students, or anything like that?

JENNIFER BERGER, FRIEND OF COLLEEN RITZER: Never, never once.

COSTELLO: This morning, brand new details as a community remembers Colleen Ritzer.

Also, under fire and on the road.

KATHLEEN SEBELIUS, HHS SECRETARY: It's a new day for people looking for health security for themselves and their families.

COSTELLO: The woman behind the fledgling Obamacare Web site with the new message for her critics.

SEBELIUS: The majority of people calling for me to resign I would say are people who I don't work for.

COSTELLO: And "Footloose 2.0." Two high schools say no to dirty dancing. A contract students must sign not to twerk.

You're live in the CNN NEWSROOM.

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COSTELLO: And good morning to you. I'm Carol Costello. Thank you so much for joining me.

This morning in a Florida courtroom a case that tests the boundaries of teenage cruelty and isolation. A court hearing has wrapped up for a 12-year-old accused of bullying a classmate to death.

Twelve-year-old Rebecca Sedwick committed suicide after being hounded by endless texts on her cell phone and in social media. Minutes ago one of her accused tormentors in court.

CNN's Ed Lavandera is outside the courthouse in Bartow, Florida.

Good morning, Ed.

ED LAVANDERA, CNN CORRESPONDENT: Good morning, Carol. Well, 12-year- old Kaitlin Roman appeared in court this morning with her attorney Jose Baez, a man who probably looks familiar to a lot of people around the country. He was the attorney that represented Casey Anthony here in Florida, in that high-profile trial.

But Jose Baez says that in this case it is her client that -- his client that is now being bullied by the juvenile legal system here in Florida.

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LAVANDERA (voice-over): Fourteen-year-old Guadalupe Shaw and 12-year- old say Kaitlin Roman say they're not guilty of stalking their classmate Rebecca Sedwick. Shaw's family tells CNN Guadalupe is not a bully.

VIVIAN VOSBURG, MOTHER: My daughter is not that type of person that would do something like that.

LAVANDERA: Investigators in Lakeland, Florida, say both girls tormented Sedgwick for months in social media posts with messages like, "I hate you, you seriously deserve to die," and "why don't you go kill yourself?" Sedgwick's mother says the taunting started over a boy and involved as many as 20 students harassing young Rebecca.

In September, 12-year-old Rebecca Sedgwick couldn't take it anymore. She climbed to the top of this cement silo and jumped.

TRICIA NORMAN, VICTIM'S MOTHER: I just don't understand how anybody could be cruel to another human being like that. It just -- it makes me sick and it just, like I said earlier, it just -- I'm more upset with the parents than the kids because they had to learn this behavior somewhere. This is how they're being taught to be.

LAVANDERA: But the nasty social media messages didn't stop after Sedgwick's death. A few weeks later this message appeared on Guadalupe Shaw's Facebook page. "Yes, I know I bullied Rebecca and she killed herself, but I don't give a blank." Guadalupe's parents say their daughter didn't write the incriminating post and suspects someone hacked her account.

JOSE MARTINEZ, GUADALUPE SHAW'S FATHER: The computer to her room. And the only other time that she could have used to send this message was my cell phone and my cell phone is always with me.

LAVANDERA: After that interview with CNN Vivian Vosburg, the women who has helped raise Guadalupe with the girl's father was arrested on unrelated child abuse and neglect charges.

Investigators discovered a Facebook video allegedly showing Vosburg punching and screaming at two young boys. She's still in jail and has not posted bond.

Meanwhile Rebecca Sedgwick's mother has hired a team of lawyers and they're preparing to file civil wrongful death lawsuits against all the students who taunted Rebecca, their parents and the school district which she says knew about the abuse and didn't do enough to stop it.

NORMAN: I think the parents of the bullies failed and I think the school failed because they didn't take it seriously when Becca kept coming to them and telling them, you know, this is what -- I went down there myself and showed them stuff that was posted on Facebook by these girls.

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LAVANDERA: And, Carol, Guadalupe Shaw is still being held in jail and Kaitlin Roman, the 12-year-old girl who was in court today has been released but she has been assigned to home confinement but she got permission from the judge this morning to walk outside of her house and at least walk around in her yard. And her lawyer is also trying to get her some sort of tutoring so -- since she's suspended from school so she can continue to do that, but the judge is very concerned about how she will be monitored if at any point she's using the computer for that.

So they insisted that the parents must be aware when she's turned the computer on and is using it, and must be monitored around the clock when she -- when she is doing that -- Carol.

COSTELLO: And if these girls are convicted, what could happen? What could their punishment be?

LAVANDERA: Well that will be interesting to see, the juvenile process here in Florida will take some time. There will be -- there is a system in place where they will be able to get guidance from the juvenile system and a lot of that will depend on what that outside prison says and advises to the court in this case.

So there's still kind of a lot of layers that have to take place and a lot of steps that have to take place before we kind of get a full understanding of what kind of punishment they'll face.

COSTELLO: Ed Lavandera, reporting live from Florida, this morning.

Crews are starting to demolish Sandy Hook Elementary School in Newtown, Connecticut, where a gunman killed 20 children and six adults last December. Town officials voted unanimously to raise the school earlier this year but they're worried scavengers will try to keep pieces of the school as souvenirs or try to sell the memorabilia online, so workers will destroy all pieces of the school and security is very tight this morning. The city plans to build a brand new school at this very same location. Classes are resuming this morning, too, at Danvers High School in Massachusetts three days after a teacher was brutally killed on campus but the bathroom where a 14-year-old student allegedly punched then slashed Colleen Ritzer with a box cutter remains closed. It's a crime scene.

CNN's Pamela Brown is outside the school this morning.

Good morning, Pamela.

PAMELA BROWN, CNN CORRESPONDENT: Well, good morning to you, Carol. Classes resumed here at Danvers High School at 7:25 Eastern Time. We're told that only the main entrance was open. There were extra police officers on hand today to help the students and faculty feel safe.

And also we've been told that Ritzer's classroom, Colleen Ritzer's classroom will be open today. There will be classes held there, as you can imagine, this is a very tough day for the student body, speaking with students. They're coming here with heavy hearts today. It's the first time they're returning to school since Colleen Ritzer was murdered on Tuesday, allegedly at the hands of one of her own students, 14-year-old Philip Chism.

So many unanswered questions here today. We spoke to students who say that they're remembering Colleen Ritzer in different ways. One student, Collin Butler, says that he's paying tribute to her in his own way. Let's take a listen to what he said.

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COLLIN BUTLER, DANVERS HIGH SCHOOL JUNIOR: It's a little bit -- you know, a little bit nerve-racking but Danvers is a strong community so I think we'll pull through.

BROWN: What's going through your mind today as you return? I could imagine that it feels very different coming back to school today.

BUTLER: Yes, pretty much just shock, you know. Just trying to return to some sense of normalcy, you know.

BROWN: Did you know Miss Ritzer?

BUTLER: Yes, I had her in class for a little bit. She was a real nice teacher. I think we all loved her.

BROWN: How are you paying tribute to her?

BUTLER: Well, I'm wearing a pink tie right now, that was her favorite color, and then at our game we're going to wear pink tape.

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BROWN: And gone but certainly not forgotten. Her presence is being felt here today, Carol. In fact, one of her inspirational quotes is posted on the school's welcome sign and it says, "No matter what happens in life, be good to people. Being good to people is a wonderful legacy to leave behind."

COSTELLO: Pamela Brown, reporting live from Massachusetts this morning.

We're expecting new details next hour about a frightening incident at the North Carolina State Fair. Five people thrown from a ride and knocked unconscious. It was the vortex ride. They were getting off that ride when it suddenly started moving.

According to CNN affiliate WNCN one person has serious head injuries and another is seriously hurt. The ride operator is among the injured.

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UNIDENTIFIED MALE: It just sounded like a bunch of stuff hitting metal and that was it. And then there was no screaming. I didn't hear any screaming and nothing out of the normal on that end, but then all of a sudden we had all of the ambulance and state trooper activity after that.

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COSTELLO: A spokeswoman said fair rides are inspected up to three times a day.

Still to come in the NEWSROOM what started as a congressional hearing into the malfunctioning Obama Web site turned into political theater.

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REP. FRANK PALLONE (D), NEW JERSEY: No, I will not yield to this monkey court or whatever this thing is.

REP. JOE BARTON (R), TEXAS: This is not a monkey court.

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COSTELLO: And that had nothing to do with the Web site's problems. Find out what caused the uproar, next.

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COSTELLO: Checking our top stories at 13 minutes past the hour.

A gunman is now in custody after a tense standoff with police in North Carolina. Police responded to a reported armed robbery at a drugstore in Belmont. The suspect took three people hostage and fired several shots at officers. He later released the hostages and surrendered. Luckily no one was hurt.

Anger over claims of U.S. spying on its allies is front and center again at a meeting of European Union leaders in Brussels. The German chancellor Angela Merkel said the allegations have severely shaken diplomatic relations. Her cell phone reportedly was monitored by the NSA. A U.S. official responded in a "USA Today" op-ed saying U.S. surveillance capabilities including with foreign partners are now under review.

The CEO of a key Obamacare contractor has quit his job. That's according to Reuters. Just this week, another Serco representative was on Capitol Hill defending his company's role in technical problems with the Web site. Serco has been on the hot seat in Britain, too. There it's accused of charging the government millions of dollars to track criminals that were dead or already behind bars.

So speaking of Obamacare, what exactly did we learn after hours of congressional testimony on those Obamacare exchanges? In a nutshell everyone is to blame. Although the contractors behind healthcare.gov absolved themselves of blame and point the finger at the federal government.

They told a congressional committee that federal officials did not fully test the site until two weeks before it went public and the government wouldn't delay the launch despite their concerns. The contractors did not accept any responsibility and instead they pointed fingers at the Medicare agency, CMS, which oversaw the whole project.

Of course the hearing wasn't without political theater. Republicans intimated the site violates medical privacy rules or HIPAA after seeing this slide hidden in computer code saying, "You have no reasonable expectation of privacy regarding any communication or data transiting on this system."

Well, the mere suggestion outraged Democrat Frank Pallone.

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REP. FRANK PALLONE (D), NEW JERSEY: Information is required in the application process and why is that? Because preexisting conditions don't matter. So, once again here we have my Republican colleagues trying to scare everybody.

UNIDENTIFIED MALE: Will the gentleman yield?

PALLONE: No, I will not yield to this monkey court or whatever this thing is.

UNIDENTIFIED MALE: This not a monkey court.

PALLONE: Do you whatever you want. I'm not yielding. I am trying to tell you that the problem here --

UNIDENTIFIED MALE: Protecting American citizens is a legitimate --

PALLONE: No preexisting conditions, the preexisting conditions don't matter, HIPAA doesn't apply, no health information in the process, you're asked your address, your date of birth, and not health information. So why are we going down this path because you are trying to scare people so they don't apply?

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COSTELLO: Joining us now is Republican Congressman Marsha Blackburn of Tennessee. She's also the vice chairwoman of the House Energy and Commerce Committee, which held yesterday's hearing.

Good morning, Congresswoman.

REP. MARSHA BLACKBURN (R), TENNESSEE: Good morning, Carol. Thank you.

COSTELLO: Thanks so much for joining me.

BLACKBURN: Sure.

COSTELLO: CNN has looked into the medical privacy question and found the Web site does not violate HIPAA, the only health related question, is do you smoke?

So what specifically were you referring to on the Web site that violates, that could possibly violate HIPAA?

BLACKBURN: We are concerned about privacy overall. Data security privacy and of course applying and complying with the HIPAA laws, and --

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COSTELLO: But what question specifically asks that would concern you about HIPAA, what medical question does it ask?

BLACKBURN: Carol, HIPAA requires you to -- it's the way you structure your Web site and the way you transit the information, the transfer rights that are there, and when you look at privacy on these Web sites, what you have to do is keep all of the application information in one server and then you have to, whether it is a physical server or a cloud server and you have to make certain you have the patient data information in another.

You have to be certain that any of the information concerning disease or condition or pertinent to the individual is separate. All of our hospitals --

COSTELLO: But there nor questions that are asked concerning any disease or health condition. The only health related question asked is do you smoke?

HIPAA has to do with medical records, right? But it's not asking for medical records or medical information.

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BLACKBURN: It also has to do with the way you transit all of this information and what we want to do is to make certain that each of these agencies, it is important enough that each of the contractors said they had been through some HIPAA training.

What we wanted to do in the interests of privacy of our constituents is make certain as they build this data hub that will contain your medical as well as your financial information and as this is shared with the different agencies with the insurance companies that are going to be --

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COSTELLO: Specifically, what information does the Web site ask for? And specifically what private information that the government doesn't already have does the Web site ask for?

BLACKBURN: Well, we want to make certain that the individual has a right to privacy, and as you heard in what was revealed yesterday, in the privacy notice that is down in the coding, an individual is not given that right to privacy.

So, not only are we looking at HIPAA, we are looking at privacy. We are looking at how the companies handle this information. Serco said they had 2,000 individuals --

COSTELLO: I'm trying to understand what kind of information you're talking about. What kind of information are you talking about? What specifically does the Web site ask that I might be afraid might be shared with whomever? Specifically. What information?

BLACKBURN: You should be very concerned not only as you navigate the Web site but as you make a purchase, and then as your information is handled. What we want to make certain is that an individual's medical information, their financial information is all going to be kept in a private manner.

What people do not want is a peeping tom who is going to look through their PII, their personally identifying information. They want to make certain the federal government has standards and are applying and abiding by the privacy laws that are on the books and by the HIPAA regulations that every hospital and every doctor abide by.

So, this is a serious investigation, looking at the entire roll-out and launch of this website, how this data is being used.

You know, Carol, it is interesting yesterday --

COSTELLO: I understand you're concerned about hacking into the site because that is a real concern because it's not working right now.

BLACKBURN: And the identifying information if of concern.

COSTELLO: And as far as specific information I'm not clear on what the Web site asks you that would violate HIPAA.

BLACKBURN: As individuals navigate the Web site and work through finding a product, as they make a purchase and as they have their information that is going to, as it's going to be data mined, if you will, what you have to make certain is that information is separated from patients and individuals, and that it is going to be anonymized and individuals have an expectation and a right of privacy that the federal government is going to abide by that.

Now, when you have a company that is utilizing as many as 80 or 100 different servers, whether they're physical or they're Cloud servers, you have to make certain that the encryption is there, that individuals who are setting up accounts have set passwords, that those passwords are being changed within every 90 days, all of this is HIPAA health care compliance.

COSTELLO: OK.

BLACKBURN: It is the customer's expectation of that privacy. If these individuals are not engineering those Web sites with these protections, with these encryptions, if they are not making certain that people do not have physical access to those Web sites, and the information held in them, then they're not going to be compliant with federal law.

COSTELLO: OK.

BLACKBURN: And we want to make certain that they are going to be compliant.

COSTELLO: I understand, I do. I just, again, the only health related question this Web site asks is do you smoke, but I hear what you're saying.

BLACKBURN: I think there are other questions that are there. There are other questions that are there.

BLACKBURN: Still to come, Brett Favre showed no fear taking hard hits in the NFL.

Now retired he's a little scared. He admits he has memory loss now.

Rachel Nichols is following this story.

Good morning.

RACHEL NICHOLS, CNN SPORTS: Good morning, Carol.

I was on the sideline for a lot of the hits that Brett Favre took over his career and I'll be back to tell you about the effects he and other NFL players are feeling, now that they're retired.

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COSTELLO: Brett Favre started 321 straight games as an NFL quarterback, often playing through pain or worse, hobbled by injury and now three years retired from being -- crushed by 300-pound linemen Favre is talking about fear that, would be the fear of his memory. He's losing his memory. He talked with Washington Sports Talk 570 Radio about not being able to remember one of his daughter's soccer seasons. (BEGIN AUDIO CLIP)

BRETT FAVRE, FORMER NFL QUARTERBACK: I don't remember my daughter playing soccer, youth soccer one summer. I don't remember that. I got a pretty good memory and I have a tendency like probably we all do, where is my glasses and they're on your head. I have that. This was a little shocking to me.

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COSTELLO: He's only 44 years old.

Rachel Nichols joins us live from New York.

This is scary.

NICHOLS: Absolutely. It's terrifying for guys like Brett.

And as you pointed out he was the NFL's iron man, more than 300 straight games, that mentality, slap a band-aid on it, get back out on the field. That was an attitude he was praised for again and again. Here's a guy that knows the value of hard work and willing to get it done.

Well, that attitude now is something that he's realizing, along with a lot of other former players, maybe the thing that costs him later in his life -- some of his memories, some of his physical abilities, and that is a scary thing for these guys, and it's something that is really causing some reckoning both around the league and around the fan base, too.

If you're like me, I love NFL football. I love watching football, but you can't ignore the fact that the guys who are playing it are having tougher and tougher repercussions, getting more and more hurt and the effects later in life are really frightening.

COSTELLO: And maybe that Brett Favre is saying this it will send a message to young players who ignore the warnings who still want to play as rough as they can.

NICHOLS: Absolutely, and it's one more argument to take a closer look at the game, see if there are ways to cut down the violence to the head. They've already changed the way players should hit on the field, whether they could lead with their helmets. So some of the technical changes to the game, some of the attitude teams have about sitting players with concussions and as you say some of the attitudes players themselves have to have.

In the end sometimes it is on you. You have to say as a younger player, coach, I can't go today -- and it's tough for a guy who's trying to prove himself. But the cost down the road may be too much to bear not to do it.

COSTELLO: Thanks, Rachel. I know you have a busy day ahead, I'm going to ask all of our viewers to watch the premiere of your new show, "UNGUARDED WITH RACHEL NICHOLS". It airs tonight 10:30 Eastern on CNN.

And I know you have an exclusive interview with King James. I can't wait to see it.

"UNGUARDED" 10:30 p.m. Eastern tonight.

Thanks, Rachel.

NICHOLS: Thanks so much.

COSTELLO: You're welcome.

Still to come: somebody's always listening, aren't they? A lesson you think George W. Bush's national security agency chief would have learned a long time ago but just got a refresher course on a train. We'll explain, next.